Revealed: Britain spent £1.1 trillion more on benefits than investment in transport, homes and technology

Public spending on welfare has surpassed infrastructure investment by £1.1 trillion over the last two decades, according to research by a leading think tank.

A report released by the Centre for Social Justice (CSJ) on Tuesday described welfare as an "anaesthetic that has kept areas of the country numbed during two decades of economic failure".

The findings come as Chancellor John Healey faces pressure from opposition parties to reduce spending on benefits at the Budget on October 28.

Between 2006/7 and 2024/25, the UK spent £1.6 trillion on working-age benefits. This far outpaced public spending on transport, science and technology, housing, economic development, and local amenities.

The report, titled "State of Dependency", revealed that between 1945 and 1979, Britain directed 4.5 per cent of GDP towards infrastructure and 2.5 per cent to working-age welfare. Today, those proportions are reversed, with 5 per cent spent on benefits and 2.5 per cent on infrastructure.

This underinvestment has heavily impacted regions with high worklessness across the North, Midlands, and South Wales, where economic output per person has barely grown in two decades.

Ben Gregg, head of welfare at the think tank, said: “For decades, governments have tried to compensate struggling regions for economic decline rather than reverse it, using welfare to numb the pain instead of providing a reason to hope.”

He added: “A Britain where everyone has a stake in prosperity is one where good jobs and thriving towns are within reach of every community.

“That is not achieved by writing a cheque and forgetting about people. It comes from investing in these places and removing the barriers that stop businesses doing the same.”

In his speech at the Labour Party conference last month, Prime Minister Andy Burnham said the Government could get the welfare bill down by supporting more people into work.

But he ruled out “crude cuts” to benefits, saying that should “never be the Labour way”.

A Government spokesperson said: “For too long, worklessness has been entrenched in too many communities, and people not given the opportunity to thrive.

“We are determined to get Britain working and boost growth in every postcode, including publishing the 10-year infrastructure strategy, increasing public investment by £120 billion to unlock private capital, and delivering reforms to planning, major infrastructure and regulation.

“We are also reforming the welfare system across the country by narrowing the gap between Universal Credit standard and health rates, restoring face-to-face assessments, and investing £3.5 billion in employment support whilst the Timms and Milburn Reviews will lay the foundation for sustainable reform.”